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Cost Estimating & Cost ManagementFlorida DOT Approach
Phillip “Greg” Davis, P.E.State Estimates EngineerFlorida Department of Transportation
Specifications & Estimates OfficeAugust 11-13, 2010
Cost Estimating & Cost Management Capacity Building Workshop
Peer ExchangeFHWA/AASHTO/MnDOTMinneapolis, Minnesota
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OVERVIEW
Construction Cost
Bid Competition
Work Program (STIP)
FDOT Mitigation Strategies
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Construction Cost
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Construction Cost
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Bid Competition
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Bid Competition
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Work Program (STIP)
Budget vs Awards
FiscalYear
Budget(Million $)
Awarded(Million $)
Percent Difference
2004/2005 2,578.9 2,890.6 12.0%
2005/2006 1,714.3 2,076.7 21.1%
2006/2007 3,231.4 3,230.4 0.0%
2007/2008 3,009.3 2,757.4 8.4%
2008/2009 3,424.6 2,449.6 28.5%
2009/2010 3,126.4 2,270.4 27.4%
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FY05/06 Impacts Rejected 71 contracts because of
high bids These were advertised at $600M and
bids came in at $977M 28 of these were re-let. 43 contracts were moved into FY
06/07
Impacts to Florida’s Program
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FY06/07 Impact Rejected 11 contracts because of high
bids These were advertised at $23.1M and
bids came in at $37.3M 2 of these were re-let. 9 projects were deferred to 07/08
Impacts to Florida’s Program
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FY07/08 to present Budget surplus Identify additional Projects to consume
excess budget
Impacts to Florida’s Program
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FDOT Mitigation Strategies
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Draft Guidebook
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FDOT Cost Increases Summit
February 2006
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Nearly 200 Attendees
Brainstorm Strategies
Short/Long Term Strategies
FDOT Cost Increases Summit
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Bid Options
Scope Alternates
Pavement Alternates
Alternative Contracting
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Specification
Contractor Feedback
Results
Maximum Budget
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Design what can be build easilyrather than build what can be designed easily
Do not design everything to federal-aid standards
Flexible Design & Engineering
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Refine Awards Criteria
Normal Criteria
Additional Criteria
Rejected Contracts
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Cost Estimate Study
August 2006
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Purpose of Cost Estimate Study
Improve Cost Estimating Processes
Enhance Tracking of Project Cost Changes
SAVE MONEY $$$ Manage Project Cost Stabilize Work Program
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RECOMMENDATIONS
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DOCUMENTING/APPROVING SCOPE OF WORK AND COST ESTIMATES
• Develop a statewide Estimates Tracking System that extracts data from existing Department systems. This system will be used to document scope of work and cost estimate changes from project inception to contract award.
• Every project scope of work and cost estimate should be reviewed by the appropriate Department Head(s) and approved by the Director of Transportation Development. Each District/TPE should decide what level of approval is required based on the size of the change.
• Central Office Estimates working with the Districts/TPE shall develop a sample electronic form for documenting these changes to be used by the Districts/TPE as they deem appropriate.
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SCOPE OF WORK & COST ESTIMATE COMMUNICATION
• Program Manager, Project Manager or EOR/Designer should be responsible for communicating the approved scope of work including changes to the District Estimates Office.
• District/TPE Estimates Office should be responsible for communicating all construction cost estimates including updates and reasons for cost changes to the District/TPE Work Program Office. District Work Program Office should only accept cost information from the District/TPE Estimates Office.
• A representative from the District/TPE Work Program Office should attend all Production Meetings.
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HANDLING REQUESTS FROM OUTSIDE GROUPS FOR ADDED WORK TO A PROJECT
• Each District/TPE shall establish an approval process for all requests. Included in this directive should be guidance when an outside group will be required to pay for the enhancements.
• Enhancement requests affecting project cost shall require District Secretary approval.
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PROJECT DEVELOPMENT AND ENVIRONMENTAL
(PD&E) PHASE COST ESTIMATES
• Prior to entering a project that has gone through a PD&E study into the Work Program, a detailed LRE shall be done on the preferred alternative.
• All projects in the Five Year Plan shall be entered into the LRE system.
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Construction Cost Performance Measures
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Construction Cost Performance Measures Adopted vs Low Bid
Official Estimate vs Low Bid
Initial Cost Estimate vs Phase II
Initial Cost Estimate vs Adopted
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ERTS was developed to support cost estimate performance measures
Contains 5 years of cost estimates Data refreshed every night
Estimates Report Tracking System (ERTS)
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Implementation of Cost Risk Analysis
Cost Risk Analysis Team
Team Members
Mission/Vision/Goals/Objectives
Team Activities
Team Members
Greg Davis – State Estimates Engineer
Kurt Lieblong – State Value Engineer Alan Autry– State Alternative
Contracting Engr Tim Brock – D4 Value & Utilities
Engineer Jose Theiler – D4 Program Service
Administrator
Mission Statement
“Manage/control the quality of construction cost & schedule estimates to ensure they are reasonable, defendable and
reliable.”
Vision Statement
“Risk Management…the way FDOT controls project unknowns and manages their impacts to cost and schedule by incorporating those risks into the decision process.”
Goals
Develop and Implement Cost Risk Analysis Program
Conduct Cost Risk Analysis Workshops on major projects
Develop a mentoring/succession/ training plan
Objectives
•To conduct cost risk analysis workshops for projects between $100M and $500M
•To manage a consultant contract for cost risk analysis workshops on projects greater than $500M
•To develop training program for cost risk analysis
Team Activities
Draft Procedures
Identify List of Projects
Software Selection
Consultant Contract Scope of Services
Training and Culture Change
Pilot Workshops
I-4 Lee Roy Selman Expressway & Tampa Port Connector
CSX Commuter Rail
I-595 Corridor Improvements
First Coast Outer Beltway
I-75 Corridor Improvements
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Thank You and Any Questions!
